Common Commercial General Liability Policy Exclusions

Commercial general liability (CGL) insurance policies shield businesses from lawsuits brought by third parties. The protection they provide to businesses for bodily injuries and property damages makes them a necessity. Unfortunately, claims made under CGL policies are sometimes denied, and when they are, it is typically because of policy exclusions. When this happens, policyholders need the assistance of an experienced Miami insurance litigation lawyer. 

Policies differ, and you should check your particular policy to be certain of its exclusions. However, some of the more common CGL policy exclusions are listed below. 

Expected or Intended Injuries

When the insured acts in a way that an injury can be expected, or is intended, the policy will exclude coverage. For example, if a business owner punches a customer, and the customer sues, the CGL policy will not provide coverage. This is not to say, however, that the CGL policy will not provide coverage if the business owner is aggressive in order to protect themselves. 

Liquor Liability

The risks associated with liquor are not covered under a CGL policy. When a business sells, serves, makes, or furnishes alcohol, they must have a separate policy that covers the risks associated with alcohol. 

Our Miami insurance litigation lawyer notes that this exclusion typically applies to businesses that serve alcohol as a normal practice. 

Contractual Liability

An insured cannot create coverage under the CGL policy by entering into a contract accepting liability for something they would not otherwise be liable for. For example, if the insured enters into a contract with a third party and agrees to accept liability for any injuries the third-party sustains, the CGL will not cover those injuries pursuant to the contract. If the coverage would have existed whether or not the contract was in place, the CGL will cover the claim.  

Property Damage

A CGL policy does not cover damages that occur in the normal course of business. This includes damages to the building, equipment, inventory, and materials.  

Workers’ Compensation

Employee injuries and work-related illnesses are not protected under the terms of a CGL policy. When employees sustain injuries on the job that prevent them from working, they typically have workers’ compensation to supplement their loss of income and cover their medical bills. 

Workers comp regulations vary from state to state, but the whole purpose of workers comp is to enable an injured worker that is unable to work to have income and medical care. In exchange, the injured worker is unable to sue their employer.

Pollution

When a business releases pollutants, the risks associated with these pollutants is an exclusion under most CGL policies. It does not matter if the release is sudden or gradual; both are excluded. Because of this, businesses that release pollutants should look into purchasing add-on pollution liability insurance. 

An example of an excluded pollution claim would be if a company spilled a toxic chemical into a river, killing a local farmer’s horses. Any claims that arise from this incident would not be covered under a CGL policy. Instead, the add-on pollution liability insurance would be the proper policy to file claims under and any denials should be addressed by a Miami insurance litigation lawyer.

Electronic Data

Electronic data is not covered by CGL policies. If a business loses or destroys intangible data, that loss is not covered under a CGL policy. For example, if a company is repairing the data network for a client, and accidentally corrupts clients’ files, the business’ CGL policy will not cover any claim made for the corruption by the client. 

Automobiles, Aircraft, and Watercraft

Businesses should purchase commercial policies for any automobiles, aircraft, and watercraft in addition to their CGL policies as most injuries arising from accidents with these vehicles are not covered under a CGL policy. According to our Miami insurance litigation lawyer, It does not matter if the vehicle is owned, borrowed, or leased. 

Mobile Equipment

Some businesses use mobile equipment including forklifts, backhoes, and tractors. These types of mobile vehicles are not covered under typical CGL policies. Instead, any business that operates mobile equipment should purchase a special policy for any injury that arises from the use of the equipment. 

If an employee accidentally backs into a customer’s car with the company tractor, any subsequent claim resulting from this will not be covered by the business’ CGL policy.

Damage to Work or Product

CGL policies cover damages the policyholder’s work or product causes to another. It does not, however, reimburse the policyholder for the work or product that created the damage and led to the claim. For example, if a business installs a leaky roof on a customer’s house, the customer may have a claim for the damages caused by the leak. The business owner will not have a claim under the CGL policy for the value of the work put into the leaky roof. 

Coverages Located In Other Policies

In most CGL policies you will find verbiage that says there is no coverage for incidents that are covered by other policies. Partly, this is so the claimant will not be able to “double dip” by making a claim under two separate policies. A Miami insurance litigation lawyer can help when confusion exists regarding which policy should cover a particular incident. 

An example is the automobile, aircraft, and watercraft exception discussed above. Business owners should have a separate corporate policy for these vehicles.

A Miami Insurance Litigation Lawyer From VPM On Your Side

When your insurance carrier denies your claim for coverage due to policy exclusions, or questions about what is covered by your CGL policy, your business needs the assistance of a Miami insurance litigation lawyer. At VPM, our attorneys are well-versed in helping policyholders that have had the claims made under their CGL policies denied. Contact our firm to learn more about how we can help your business. 

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